What is bridging finance and how is it used in property?
Bridging finance is a short-term loan secured on property, usually for up to 24 months, used to buy or refinance quickly before longer-term funding or a sale is in place. It is fast but expensive, with interest charged monthly, and every lender needs a clear exit strategy.
Read more in our guide: Mortgage debt and your portfolio
Bridging finance at a glance
| Feature | Typical position |
|---|---|
| Term | Usually 1 to 24 months |
| Interest | Monthly rate, often rolled up and paid at the end |
| Fees | Arrangement fee, valuation, legal fees and sometimes an exit fee |
| Security | First or second charge on one or more properties |
| Regulation | FCA regulated if secured on the borrower's own home |
| Exit | Sale or refinance onto a term mortgage |
How bridging works
A bridging lender looks mainly at the value of the security and the exit, rather than long-term affordability. Loans can be arranged in days or weeks. Interest is usually quoted as a monthly rate and is often rolled up, so nothing is paid until the loan is repaid, but the debt grows every month.
How investors use it to buy portfolios
Many investors who buy portfolios quickly use bridging to complete, then refinance each property onto a buy-to-let mortgage. For the seller this is a strength and a risk: it can allow a fast completion, but it is still finance, so it is worth checking the buyer's funding is approved before exchange. A genuinely cash funded buyer removes that risk.
When landlords use it
Landlords sometimes bridge to clear a mortgage that is due for repayment, to stop repossession, or to buy before a sale completes. It can buy time, but rolled-up interest and fees can absorb much of the equity if the exit is delayed. If the exit is a sale, a realistic price and timescale should be in place before the loan is drawn.
Main risks
- Default interest and penalties if the loan overruns its term.
- Valuations that fall short, reducing the amount the lender will advance.
- An exit that depends on a refinance that is declined, often because of interest cover tests.
Official Sources and Further Reading
General information for landlords in England, checked against official sources in October 2026. It is not tax, legal or financial advice: speak to a qualified accountant or solicitor about your own circumstances.
Frequently Asked Questions
Bridging finance is a short-term loan secured on property, usually for up to 24 months, used to buy or refinance quickly before longer-term funding or a sale is in place. It is fast but expensive, with interest charged monthly, and every lender needs a clear exit strategy.
Bridging secured on a home you or your family live in is generally regulated by the FCA. Bridging secured only on investment property is usually unregulated, so take independent advice.
It can if it clears the arrears or the whole mortgage in time, but it adds cost. Selling some or all of the portfolio is often the cheaper long-term answer.
Not necessarily, but ask for evidence that the loan is approved and the valuation is done before you exchange contracts.
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